To: The Perfect Hedge who wrote (3675 ) 10/3/1998 4:37:00 PM From: Lucretius Read Replies (1) | Respond to
thanks beebs, I'd expect us to visit 7000 by the end of this week, to set up for an even bigger fall the weeks of the 12th and 19th. Recall what I have been saying about the dollar leading this mkt lower. On Fri the dollar opened at a new low below the bear flag that had been forming. It then rallied during the day back just short of the previous low (classic technical behavior as I believe Thean will agree). The TRAN showed much the same activity. This rally in the dollar allowed the DOW to rally. The next move for the dollar will be a flat or down day for Mon, is my guess. That means the mkt should be flat or DOWN. as the dollar blows through this last low, the mkt should make the move to 7000. The "crash" of equities that I have been discussing should be lead and in the end coinciding w/ (as the more dense of money managers finally figure out just what in the world is going on and say "Dou!") the crash of the dollar from the 94 to 86 levels. Keep in mind the long bond will top out VERY soon, and will likely crash w/ the dollar and equity mkts. This will be a big surprise to most and will be thing that many are unhedged for which is why we will get a crash in the equities mkt because for many, their hedge is the bond mkt. As this hedge stops working, the liquidations of LTCM will look like chump change. The only place to hide will be gold, this will provide us w/ the massive rally in the XAU and bullion (although, the XAU should participate to the downside on the biggest and last day of the crash so don't be surprised when it comes down. Use it as a buying opp as you cover shorts.)decisionpoint.com decisionpoint.com
